Why shouldn't it? It would definitely be much more popular with an underground station on campus. Many HSR lines, worldwide, have underground tunnels and stations right under established downtowns of cities. Spain loves these.A new HSR line shouldn't go straight through an established downtown of a city. In this case it would probably be most sensible to put the State College station somewhere south of downtown (PA26 / PA45 / Whitehall Rd. areas?) and encourage smart development around it. The university's campus transit could link up to it there.
I looked at ways to go around campus... but none of them work. They all require *both* slow curves *and* expensive land acquisition, (and they'd all have to be mostly elevated or underground, too). At that point, what are you *doing*, spending time and money on land acquisition to make a slower route which is less convenient and gets fewer riders?!? It makes more sense to go straight under; this way you can line it up with the approaches from the east and from the west and avoid serious doglegs.